EFA does not match I fund

[TSPTrader]

What fund symbol best represents the TSP I Fund for technical analysis?
EFA no longer matches.

[CORY_S2]

ACWI

[TSPTrader]

Thanks

[mrwawa]

ACWI includes US and China stocks, so is not equivalent to the new I fund. I don't think there is a 1:1 etf

[Bubba]

ACWI includes US and China stocks, so is not equivalent to the new I fund. I don't think there is a 1:1 etf

Yes, but remember the amount that's invested outside of the EAFE index is not much. Don't remember the percentages by heart (I don't have time to show the differences), but most of the index that the "new" I fund follows is still heavy into Japan, the UK and somewhat Europe. There's a tiny sliver dedicated to emerging markets (something like 15% in total, my best recollection).

[Scarfinger]

ACWI includes US and China stocks, so is not equivalent to the new I fund. I don't think there is a 1:1 etf

Yes, but remember the amount that's invested outside of the EAFE index is not much. Don't remember the percentages by heart (I don't have time to show the differences), but most of the index that the "new" I fund follows is still heavy into Japan, the UK and somewhat Europe. There's a tiny sliver dedicated to emerging markets (something like 15% in total, my best recollection).

AI:

This change significantly expands coverage to include emerging markets and small-capitalization stocks, providing exposure to over 5,000 companies across 40+ countries.

Key Details of the I Fund Changes:
Broader Exposure: The new index covers roughly 90% of non-U.S. investable market capitalization, up from 55% under the old index.

Emerging Markets Added: The fund now includes stocks from 23 emerging market countries.

Exclusions: The fund specifically excludes China and Hong Kong.

Increased Diversification: Includes small-cap stocks in addition to the large- and medium-cap stocks previously held.

Objective: The FRTIB aimed to provide opportunities for higher returns without a significant increase in risk.

[Bubba]

ACWI includes US and China stocks, so is not equivalent to the new I fund. I don't think there is a 1:1 etf

Yes, but remember the amount that's invested outside of the EAFE index is not much. Don't remember the percentages by heart (I don't have time to show the differences), but most of the index that the "new" I fund follows is still heavy into Japan, the UK and somewhat Europe. There's a tiny sliver dedicated to emerging markets (something like 15% in total, my best recollection).

AI:

This change significantly expands coverage to include emerging markets and small-capitalization stocks, providing exposure to over 5,000 companies across 40+ countries.

Key Details of the I Fund Changes:
Broader Exposure: The new index covers roughly 90% of non-U.S. investable market capitalization, up from 55% under the old index.

Emerging Markets Added: The fund now includes stocks from 23 emerging market countries.

Exclusions: The fund specifically excludes China and Hong Kong.

Increased Diversification: Includes small-cap stocks in addition to the large- and medium-cap stocks previously held.

Objective: The FRTIB aimed to provide opportunities for higher returns without a significant increase in risk.

Ok, I got "unlazy." I don't recall where I read all the information about the exact constituents, but back when it was announced, before coming out, it showed to be very similar to the EAFE index, just something like 15% was dedicated to emerging markets. That was like a year before it was actually changing with the I Fund. I now checked the information which is somewhat vague https://www.msci.com/documents/10199/79 ... 9ff978d508. Also, this from Morningstar is interesting https://www.morningstar.com/personal-fi ... tsp-i-fund, but what matters more is the percentage of where an index is hiding. So, if we go from like 100 companies to 1000 companies, that's great, but if the first 100 comprise 90% of the index and the other 900 comprise only 10% then things don't change that much (in my opinion). In any case, I'll reserve my judgement. By the way, this is interesting too, to compare the new index vs. the old index (https://www.msci.com/documents/10199/82 ... bc9e07b8ba).

[Scarfinger]

I saw the Morningstar report before. My understanding is the I-fund went from more of a large cap developed International fund to more of a Total International fund that has more small and mid cap companies. Only time will tell if it is better.

I personally like Total US and Total International funds at Fidelity and see it as a positive change for TSP.

[Bubba]

I saw the Morningstar report before. My understanding is the I-fund went from more of a large cap developed International fund to more of a Total International fund that has more small and mid cap companies. Only time will tell if it is better.

I personally like Total US and Total International funds at Fidelity and see it as a positive change for TSP.

It is a positive development for the TSP. Totally agree. In fact, from what I can tell, the periods when the I fund used to outperform, it'll likely now outperform even more. The emerging markets portions tend to outperform during different seasonally interesting periods like December, March and April (of course depending on the presidential cycle, which I use, it's different per election cycle) according to seasonality.

[mrwawa]

So ACWI was down 0.53 today, but the I was up around 0.5. I am still not convinced ACWI tracks the I. Has anyone really looked at the correlation?

[Bubba]

So ACWI was down 0.53 today, but the I was up around 0.5. I am still not convinced ACWI tracks the I. Has anyone really looked at the correlation?

Much happens in between such as dividends, stock splits, etc. In this case, the underlying index was actually up yesterday. That's because Japan had a good day, but also some other emerging markets did exceedingly well (I think Poland) and a few others. Remember the index tracks companies, so sometimes a country's index is down, but individual companies do better.

[mrwawa]

But we want a ticker that will track the I, and from what I see EFA is still more correlated with the I relative to ACWI. ACWI over the last 12 months, up 19.98, EFA up 28.86, I fund around 34. Same story for YTD. Daily correlations are higher between I and ETF versus I and ACWI (~.97 VS ~.76). Just my thoughts, open to new ideas.

[Vetch]

What do you all think about VXUS? Or a 75/25 mix of IEFA and IEMG? IEFA captures World Ex US, Canada, and EM. IEMG captures the Emerging Mkts piece.

[mrwawa]

I was up .24, EFA was up .33 while ACWI was down .38. EFA is obviously not a perfect match, but it seems closer than ACWI . Not sure about the mixes you are suggesting, @Vetch.

[Vetch]

The YTD change in the I Fund is 6.97%.

The YTD change for each of the proxy tickers being discussed is as follows:
ACWI: 2.47%
EFA: 5.99%
VXUS: 6.38%
IEFA/IEMG: 6.48%

So far this year, EFA seems to be tracking the I Fund better than ACWI. But VXUS and the IEFA/IEMG blended ticker are both tracking closer.